In 1958, we achieved great successes on all fronts—be it on the ideological and political front, the industrial front, the agricultural front, the transportation front, the commercial front, the culture and education front, the national defense front, or in other areas. This was especially true in the industrial and agricultural sectors, where a remarkable leap forward was made. In 1958, people's communes were widely established in rural areas across the country.

The establishment of people's communes expanded and elevated the former collective ownership of the means of production in the countryside, and began to incorporate certain elements of ownership by the whole people. The people's communes were far larger in scale than the agricultural producers' cooperatives and integrated industry, agriculture, commerce, education, and military affairs, as well as farming, forestry, animal husbandry, sideline production, and fishery. This vigorously promoted agricultural production and the overall development of the rural economy. The broad masses of peasants, especially the poor and lower-middle peasants, expressed a warm welcome for the people's communes. A vast number of cadres did a great deal of useful work in the people's commune movement. They demonstrated tremendous enthusiasm as communists, which was extremely valuable, and without such enthusiasm, it would have been impossible to achieve such great successes. Of course, in our work, there were not only great achievements but also some shortcomings. In a new and unprecedented social movement involving hundreds of millions of people, such as the people's communes—where experience was lacking—both the people and their leaders could only gradually gain experience from their practice, progressively deepen their understanding of the essence of things, expose contradictions, resolve these contradictions, affirm the achievements in their work, and overcome the shortcomings. Anyone who claims that a vast social movement can be entirely free of shortcomings is nothing but a utopian dreamer, an onlooker who merely criticizes, a faultfinder, or simply a hostile element. The relationship between our achievements and shortcomings is just as we often say: it is like the relationship between nine fingers and one finger out of ten. Some people doubt or deny the Great Leap Forward of 1958. They doubt or deny the superiority of the people's communes. Such views are clearly entirely wrong.

The people's communes are now undertaking consolidation and strengthening work, that is, rectifying the communes. Debates have already been held or are being held on two questions: whether there was a Great Leap Forward in 1958 and whether the people's communes have superiority. Party committees at all levels, in the course of rectifying the communes and following the guidelines of the Sixth Plenary Session, have adopted the sequence of first affirming the achievements of the Great Leap Forward and the superiority of the people's communes, and only then pointing out shortcomings and mistakes in the work. This approach is entirely appropriate. Doing so can protect the enthusiasm of the broad masses of cadres and the people. As far as cadres are concerned, over ninety percent are good and should be resolutely protected.

Now let me discuss some issues concerning the people's communes. I believe there is currently a contradiction within the people's communes—a contradiction that can be said to be quite serious. It has not yet been recognized by many comrades. Its nature has not been exposed, and therefore it has not been resolved. Yet I believe this contradiction must be swiftly resolved, so as to help mobilize the greater enthusiasm of the broad masses and improve our relationship with grassroots cadres. This mainly concerns the relationship between county Party committees, commune Party committees, and grassroots cadres.

What kind of contradiction is it? As you all can see, at present, in some matters, our relationship with the peasants is in a state of considerable tension. A prominent phenomenon is that after the great agricultural harvest of 1958, the procurement of grain, cotton, oilseeds, and other agricultural products has still not been fully completed in some areas. Moreover, almost nationwide (except in a few disaster-stricken areas), there has been a widespread storm of concealing output and secretly dividing it up, and of making a great clamor about "shortages" of grain, oilseeds, pork, and vegetables. The scale of this storm surpasses even the two grain storms of 1953 and 1955. Comrades, please think about it: what exactly is going on? I believe we should look through these phenomena to discern the essence of the problem—that is, where the principal contradiction lies. There are several reasons for this. But I think we should mainly seek answers from our understanding of the ownership system of the rural people's communes and from the policies and methods we have adopted.

Does the ownership system of the rural people's communes need to go through a process of development? Is it the case that as soon as a commune is established, it immediately possesses complete commune ownership and that production team ownership can be abolished right away? By "production team," in some places I refer to the production brigade or management district, but overall it roughly corresponds to the former agricultural producers' cooperative. At present, many people still do not understand that commune ownership must undergo a process of development. Within the commune, transitioning from the small collective ownership of the team to the large collective ownership of the commune requires a process—a process that will take several years to complete. They mistakenly think that as soon as a people's commune is established, the means of production, human resources, and products of each production team can all be directly controlled by the commune leadership organs. They mistake socialism for communism. They mistake distribution according to work for distribution according to need. They mistake collective ownership for ownership by the whole people. In many places, they deny the law of value and deny equal-value exchange. As a result, within the commune, they practice equalizing the rich and the poor and implementing egalitarian distribution; they transfer certain property of the production teams upward without compensation; and on the banking side, many rural loans are uniformly called in.

"Leveling, transferring, and collecting payments" have caused great panic among the broad masses of peasants. This is the most fundamental problem in our current relationship with the peasants.

With the establishment of the communes, we have commune ownership. As stated in the Beidaihe Resolution and the Resolution of the Sixth Plenary Session, such communes—large in size and high in degree of public ownership—possess tremendous superiority. They are the best form for our countryside to transition from socialist collective ownership to socialist ownership by the whole people, and also the best form for us to transition from socialist society to communist society. This is beyond doubt and has been fully affirmed. If anyone harbors doubts about such a fundamental issue, they are completely mistaken. That would be right-leaning opportunism. The problem now is that in addition to the portion directly owned by the commune, there still exists ownership by the production brigade (management district) and ownership by the production team. To essentially eliminate the distinctions among these three levels of ownership, to fundamentally transform the three-level ownership into single-level ownership—that is, to develop from incomplete commune ownership into complete, basically unitary commune ownership—requires the commune to have stronger economic power, and requires the economic development levels of the various production teams to be broadly leveled out. And this will take several years. At present, the issue is that we must recognize this indispensable process of development, rather than regarding it as some sort of concession to the peasants. Before achieving rural ownership by the whole people, the peasants will always remain peasants, and they will always have a certain dual character along the socialist road. We can only guide the peasants step by step to leave smaller collective ownership and move through larger collective ownership toward ownership by the whole people. We cannot demand that this process be completed all at once, just as we could earlier only guide the peasants step by step to leave individual ownership and move toward collective ownership. Moving from incomplete commune ownership to complete, unitary commune ownership is both a process of raising the production levels of poorer production teams to those of richer production teams, and a process of expanding commune accumulation, developing commune industry, realizing agricultural mechanization and electrification, and achieving commune industrialization and national industrialization. At present, the things directly owned by the commune are still not many—such as commune-run enterprises, commune-run undertakings, and public accumulation funds and public welfare funds under commune control. Nevertheless, herein lies our great, bright, and splendid hope. Because every year, the commune can extract accumulation from the teams, increase accumulation through the profits of commune-run enterprises, and receive state investment. Its development will not be slow but rather very rapid.

Regarding the issue of state investment, I suggest that within seven years, the state invest several billion to over ten billion yuan in the communes to help them develop industry and assist poor teams in expanding production. I believe that it will not take long for poor communes and poor teams to catch up with rich communes and rich teams and develop greatly.

When the communes possess strong economic power, they can realize complete commune ownership, and can then further realize ownership by the whole people. This will take roughly two five-year plans. Rushing it won't work—haste makes waste. This is also what the Beidaihe Resolution stated: it will take three or four years, five or six years, or even longer. Then, after passing through several further stages of development, in fifteen, twenty years, or even longer, the socialist communes will evolve into communist communes.

The Resolution of the Sixth Plenary Session clearly stated the developmental stages that must be traversed in the transition from collective ownership to ownership by the whole people and from socialism to communism, but it did not specify that the collective ownership of the communes also requires a process of development. This is a shortcoming, because at that time we did not yet recognize this issue. Consequently, comrades at lower levels also blurred the distinctions among the three levels of ownership—commune, production brigade, and production team—and in practice denied the ownership of the production team (or production brigade, which roughly corresponds to the former advanced cooperative) that still exists within the commune and holds tremendous importance. This inevitably provoked resolute resistance from the broad masses of peasants. The nationwide storm since the autumn harvest of 1958 over "shortages" of grain, oilseeds, pork, and vegetables is a concentrated expression of this resistance. On one hand, Party committees at the five levels—central, provincial, prefectural, county, and commune (or six levels if the management district is included)—sharply criticized the "selfish departmentalism" and concealment of output and secret distribution by production teams and squads. On the other hand, the production teams and squads almost universally practiced concealment of output and secret distribution, even going so far as to hide grain in deep cellars and post sentries to protect their products. I believe that there is indeed a kind of selfish departmentalism in which there is a surplus of products that should be sold to the state but is not, and Party cadres who practice such selfish departmentalism deserve criticism. However, in many cases, this cannot be called selfish departmentalism. Even if selfish departmentalism is real and should be criticized, before carrying out such criticism, we must first examine and correct two of our own tendencies—namely, the tendency toward egalitarianism and the tendency toward excessive centralization. The so-called egalitarian tendency denies that there should be differences in income among various production teams and among individuals. Denying such differences means denying the socialist principle of distribution according to work, of more pay for more work. The so-called tendency toward excessive centralization denies the ownership of the production teams, denies the rights due to them, and arbitrarily transfers the property of production teams upward to the commune. At the same time, many communes and counties have extracted too much accumulation from the production teams, and commune administrative expenses include great waste (for example, some large communes have as many as a thousand staff members who do no labor and yet consume, and some even maintain full-time cultural troupes). Both of these tendencies involve the denial of the law of value and the denial of equal-value exchange, which is of course incorrect. All these things cannot but provoke dissatisfaction among the production teams and the broad commune members.

Our task now is to clearly explain the principles to the broad masses of cadres, and through thorough deliberation and discussion, to help them gain a genuine and correct understanding. Then, together with them, we must properly and resolutely correct these tendencies. We must overcome egalitarianism and change the situation in which power, financial resources, and human resources are excessively concentrated at the commune level. When the commune makes unified decisions on distribution, it must recognize that there should be reasonable differences in income among different teams and among different commune members. The food and wages of poor teams and rich teams should be different. Wages should be assessed flexibly within fixed grades. The commune should practice the delegation of powers, with three-level management and three-level accounting, and accounting at the team level should serve as the foundation. Equal-value exchange should be practiced between the commune and the teams, and among the teams themselves. Commune accumulation should be suited to circumstances and should not be set too high. Waste in commune management must be resolutely overcome. Only in this way can we effectively overcome the kind of selfish departmentalism that truly exists among some people and consolidate the commune system. By doing this, the power of the commune level is not very small—it remains quite considerable. The leading organs at the commune level are not left with nothing to do; they still have many tasks to perform, and they must exert great effort to do them well.

After the communes were established in the autumn of 1958, a wave of "communist wind" swept through. There were three main manifestations: first, leveling the differences between rich and poor; second, excessive accumulation and too much obligatory labor; and third, the "communization" of various types of property. The so-called "communization" of various property involved different circumstances. Some property, such as most private plots, should have been transferred to the commune. Some had to be borrowed, like part of the furniture, tables, chairs, and benches needed for commune public services, as well as the knives, pots, bowls, and chopsticks required by communal dining halls. Some property, such as chickens, ducks, and part of the pigs, was taken over by the commune without compensation, even though it should not have been. In this way, the communist wind began to blow. To some extent, this actually created a situation where some people appropriated the fruits of others' labor without compensation. Of course, this does not include public accumulation, collective welfare, or certain unified distribution methods, such as the grain supply system, that were approved by all commune members and higher Party organizations, as these do not constitute uncompensated appropriation. Seizing the fruits of labor without compensation is something we do not permit. Consider this: we only uncompensatedly deprived the Japanese, German, and Italian imperialists, the feudalists, and the bureaucratic capitalists of their means of production, as well as landlords of part of their houses, grain, and other means of subsistence. None of this involved appropriating the fruits of others' labor, because those who were deprived were all exploiters who lived off the labor of others. As for the means of production of the national bourgeoisie, we did not resort to uncompensated confiscation but implemented a policy of redemption. Although they were exploiters, they had been allies in the democratic revolution and were not now opposing socialist transformation. By adopting the redemption policy, we gained the political initiative and benefited economically. Comrades, if this is how we treat the exploiting classes, how can we then appropriate the fruits of the labor of the working people without compensation?

We point this out to explain that forcibly leveling the differences between rich and poor and arbitrarily diverting the property of production teams is wrong, not to advocate settling old scores among the masses. On the contrary, we believe that, generally speaking, old accounts should not be settled. In any case, poorer communes, poorer teams, and poorer households, relying chiefly on their own efforts, along with support from the commune and the state, can extricate themselves from their current difficulties in three, five, or seven years by mainly practicing self-reliance and seeking assistance from the commune and the state only as a supplement. There is absolutely no need to take advantage of others to solve problems. We poor people—that is, the poor and lower-middle peasants, who make up the majority of the rural population—should have ambition. Like the Wang Guofan Cooperative in Jiming Village District, Zunhua County, Hebei Province, which was called the "Poor Fellows' Co-op," we should stand up, work hard with our own hands, transform our world, and build our still-backward countryside into a prosperous and thriving paradise. That day will surely come; just watch.

In addition to the tendencies toward egalitarianism and excessive centralization, there are also highly unreasonable aspects in the current allocation of rural labor. Specifically, the labor force used for agriculture (including farming, forestry, animal husbandry, sideline production, and fishery) is generally too small, while the number of administrative personnel for industry and service sectors is generally too large. These latter three categories of personnel must be reduced. The allocation of labor in communes is a major issue. Competition for labor is currently one of the key conflicts between production teams and the commune, the county, and state organs at and above the county level. Labor distribution must be planned comprehensively according to the legitimate needs of agriculture, industry, transportation, services, and other sectors, ensuring a proper balance in all areas. It is necessary for communes and counties to establish industries, but they should not set up too many all at once. All industrial and mining enterprises must economize on labor and must not allow any waste of manpower. Wherever personnel in the service sector are excessive, they must be cut. Administrative staff should account for only a few thousandths of the total commune population. In developing cultural and educational undertakings, care should be taken not to use too much labor. Communes must not have full-time performing arts troupes, sports teams, and the like.

We must simultaneously plan and balance the work of ensuring the people's livelihood, managing commune accumulation, and meeting the needs of the state. Only in this way can we truly achieve a coordinated national strategy. Otherwise, the so-called coordinated strategy is actually only half a strategy, or an incomplete one. Generally speaking, the accumulation in communes in 1958 was somewhat excessive. Therefore, each locality should, based on specific conditions, set an appropriate limit for commune accumulation in 1959 and announce it to the people, so as to stabilize their minds and heighten their enthusiasm for production.

The people's communes must adhere to the principle of running the communes with diligence and frugality and must firmly oppose waste. In grain work, given recent experience, a strict system for collecting, managing, and using grain must be established in the future. The communes' grain must be properly collected, managed, and used. Society's demand for grain will always continue to grow, so at least for the next few years, we must not proclaim that the grain problem has been "solved."

Recently, cadres in various provinces have been going down to become commune members, and this is a very good practice. I propose that cadres at all levels be sent down in batches and for different periods to become commune members, ranging from a minimum of one month to a maximum of one and a half months. Some cadres can go down to factories and mines to become workers. This method proved effective last year and should be more widely promoted this year. In short, we must continuously strengthen our ties with the broad masses.

By adopting the policies and measures mentioned above, I believe that our current relations with the peasants and grassroots cadres will soon improve greatly. The vast numbers of peasants have already gained tremendous benefits from the commune movement and the Great Leap Forward of 1958, and they are resolutely demanding continued leaps and the consolidation of the commune system. This is a fact that no tide-watchers or account-settlers can overturn. Our cadres did a great deal of excellent work last year and achieved magnificent results, which the masses have witnessed with their own eyes. The only problem is that in improving the relations of production—that is, in the matter of commune ownership—we advanced a bit too far. Clearly, this shortcoming is only a matter of one finger out of ten. Moreover, it was primarily because the Central Committee did not issue specific directives earlier, leaving lower-level cadres momentarily unsure of the proper limits. As I mentioned earlier, such a situation was hard to avoid in a complex and unprecedented undertaking like the people's commune movement. As long as we openly explain this to the masses and overcome the shortcomings in our work over the past period through practical actions, the initiative will be fully in our hands, and the masses will surely stand with us. We must bear in mind that, on the one hand, the tide-watchers and account-settlers will come out to mock us, and on the other hand, landlords, rich peasants, counter-revolutionaries, and bad elements will try to sabotage us. However, we must tell the cadres and the masses that when these things happen, there is nothing for us to fear in the slightest. We should keep calm, remain silent for a while, grit our teeth and stand firm, and let those people fully expose themselves. When that time comes, the masses will surely distinguish right from wrong and friend from foe, and they will rise to smash the ridicule of the backward elements and the attacks of the hostile ones. After such a process of rectifying and consolidating the people's communes, our unity with the masses will become even closer. Under the leadership of the great Communist Party of China, the 500 million peasants will surely feel even more cheerful and be even more full of vigor. We can certainly achieve an even greater leap forward in 1959. The cause of the people's communes will surely flourish day by day on a solid foundation, and victory will be ours.